Failures provoke Euro scepticism

Senior industry figures this week questioned the wisdom of Amec's planned push for new business in mainland Europe, and warned that UK contractors have a history of failure with such ambitions.

The warning follows Amec's announcement last week that it plans to enter into strategic alliances in Europe in order to secure sustainable future growth (see Business page 13). Amec chief executive Peter Mason revealed that the company was already engaged in talks with potential European partners, raising the possibility of a merger with a continental contractor.

However, Ian Grice, managing director of Alfred McAlpine Civil Engineering and its overseas operations, told CJ: "My view is that it is very difficult on mainland Europe at the moment and you've got to look at the experience that Tarmac, Mowlem and others had in the mid-1980s. Similarly, a lot of big European contractors have come to the UK and have not made money either.

"I don't think there are any quick fixes. To me, it's not a very exciting prospect. It's very difficult to break into a mature market and the cultural barriers remain in place for years afterwards. We look are looking towards the Middle East and the Far East," he added.

He said that Amec's move seems to be an attempt to secure increased turnover, where as Alfmac is concentrating on increasing profitability in the UK in niche markets, such as facilities management, and through the Private Finance Initiative.

Taylor Woodrow Construction chairman Mike Laycock was similarly cool: "I wouldn't sing from the same song sheet as Amec." He said that neither the continental European market nor forming alliances with foreign contractors was not a priority for Taywood, as the company had interests in other parts of the world and the in-house skills to work in those markets.

Commenting on the scepticism of rival contractors, a spokesman for Amec said: "Isn't that terribly British? Others have failed, but that isn't a reason why it will not work for us this time."

He said that Mason is approaching the end of a strategic review of the group's operations which has shown that the Continent is an untapped source of future growth which can be used as a springboard for further expansion into other world markets in the longer term.

He said that the company was conscious that it is not large enough on its own to take on the European contracting giants, which is why talks are underway with a potential partners.

He added: "European contractors are eating into the UK market already - we can't go on as we are."